Dodds v. Dabbs, Hickman, Hill & Cannon, LLP
324 Ga. App. 337
Ga. Ct. App.2013Background
- Dodds, owning 25% of Savannah Air, gave notice in Aug 2005 of withdrawal from Savannah Air Center, LLC (SAC) and its members.
- In May 2007, Dodds and SAC settled value of Dodds’s interest and Dodds signed a General Release discharging SAC and privity from all claims related to his employment, membership, and ownership.
- Dodds subsequently filed two lawsuits: one against SAC (initially Apr 2008, renewed Mar 2010) and another in Sep 2010 against the accounting firm Dabbs, Hickman, Hill and Cannon, LLP.
- After settlement, Dodds claimed tax documents showed 2006 and 2007 income allocations from SAC, contradicting SAC’s presettlement representation that Dodds was no longer a member after withdrawal.
- The trial court granted summary judgment for SAC and the accounting firm; Dodds’s remaining claims were dismissed; SAC’s appeal (A13A1518) was dismissed as moot.
- The court held that the release and merger clause barred further claims and that the accounting firm fell within the release as an agent of SAC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent inducement to execute the release | Dodds claims SAC’s post-settlement actions show fraud in inducement. | Merger clause and no fraudulent inducement evidence bar the claim. | No fraud; release enforceable. |
| Whether remaining claims against SAC are precluded by the release | Release did not extinguish all Dodds’s claims. | Release extinguishes all claims relating to Dodds’s SAV ownership/employment. | Claims barred; release extinguished remaining claims. |
| Whether the accounting firm is covered by the release as an agent | Accountants not named; not covered. | Accountants are agents; scope includes services rendered to SAC. | Accounting firm covered as an agent; released. |
| Whether the fraud claim against the accounting firm is barred by the release | Release did not explicitly name the accounting firm; potential fraud claim survives. | Release and agency language bar such claims. | barred; scope includes the accounting firm. |
| Mootness of SAC appeal on dismissal of A13A1518 | N/A | N/A | Case dismissed as moot. |
Key Cases Cited
- Posey v. Medical Center-West, 262 Ga. 185 (Ga. 1992) (releases: external evidence against third party admissible)
- Lackey, 262 Ga. 185 (Ga. 1992) (clarifies who is released by a settlement)
- Harkins v. CA 14th Investors, 247 Ga. App. 549 (Ga. App. 2001) (affiliates/agents can be released; broad release terms)
- Driscoll v. Schuttler, 697 F. Supp. 1195 (N.D. Ga. 1988) (accountant defendant covered by release as advisor/agent)
- Meadow River Lumber Co. v. Univ. of Ga. Research Foundation, 233 Ga. App. 169 (Ga. App. 1998) (affirmation of contract rights; rescission consequences)
- Wender & Roberts, Inc. v. Wender, 238 Ga. App. 355 (Ga. App. 1999) (contract interpretation; effect of merger/§13-2-1)
- Novare Group v. Sarif, 290 Ga. 186 (Ga. 2011) (restoration as prerequisite to rescission; merger/disclaimer impact)
- Ainsworth v. Perreault, 254 Ga. App. 470 (Ga. App. 2002) (merger clause precludes reliance on non-contract disclosures)